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[SOS] Hendricks County man sentenced to 16 years for running a Ponzi scheme

Start Date:

1/31/2014

All Day

End Date:

1/31/2014

Entry Description

Scam artist bilked investors from Johnson and Hendricks Counties out of $1.5 million

INDIANAPOLIS (Jan 30, 2014) — Today, Ryan Koester of Brownsburg was sentenced to 16 years and ordered to pay over $517,000 in restitution for his role in stealing $1.5 million from 24 investors in Johnson and Hendricks Counties as well as the State of Colorado. Koester solicited clients through his company Rykoworks Capital Group, claiming to be an expert in foreign commodities trading. He told clients he would invest their funds in foreign markets, but instead, used the funds for his personal living expenses and risky Internet trading.

Koester was never licensed to sell securities in the State of Indiana and had no financial trading education. He scammed his clients by guaranteeing their initial investment and high return rates. In one instance, Koester even exploited the trust of his college fraternity brother to convince him to invest. Instead of investing funds as promised, Koester used the investment funds for personal living expenses and on internet trading.

“This case is a classic example of a Ponzi scheme,” said Secretary Lawson. “Preying on personal relationships with his victims, Koester manipulated the facts and his expertise. He even went so far as to use social media to solicit new clients to scam.

“Unfortunately, the warning signs were there. Neither he nor his products were licensed. If only one investor would have called my office or checked our online database, the scheme would have crumbled. I hope this serves as a reminder to everyone to always make sure to use a licensed financial professional. We appreciate the support of Bradley Cooper, Prosecutor of Johnson County in pursuing this matter.”

The investigation of Ryan Koester began when one of his investors filed a complaint with the Secretary of State’s office. This prompted an investigation by the Secretary of State’s Prosecution Assistance Unit, which led to Johnson County Prosecutor Brad Cooper filing charges against Ryan Koester. Prosecutor Cooper deputized Secretary of State’s office attorney Diana Moers Davis to aid the prosecution. Koester pleaded guilty in November of 2013 to four class C felony securities fraud violations. Today, the court conducted the sentencing hearing.

Johnson County Judge Mark Loyd sentenced Koester to 16 years total. Two of the 16 years are deemed executed with the remaining 14 years to be served on probation. Koester is ordered to pay $517,212 in total restitution to be paid monthly. Koester is also ordered to undergo a psychological evaluation with the possibility of counseling.

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